The inflation rate had dropped to less than 3% by 1991 and more or less stayed within the target band (1% to 3%) – until now. “The Reserve Bank played a huge part, but there were also many other drivers,” he says. Deregulation of the economy, which allowed for much cheaper products to be imported, helped start bringing down the inflation rate in the 1980s. While the Reserve Bank can’t stop the war in Ukraine, it does have tools to control domestic inflation, he says. “The Reserve Bank is not well-placed to deal with inflationary periods that are not about domestic drivers.

Source: Stuff September 08, 2022 04:07 UTC